November brought mixed economic news. Fresh stats releases clearly support our view that the economy is already returning to growth, even sooner than we expected. The positive signals from the real sector are still infrequent and not entirely convincing, but the underlying trend is positive. At the same time, negative signs persist – the FX market has been turbulent over the past three weeks and the UAH/USD FX rate broke through the 21-23 range the NBU has been seemingly defending since May. We don't see any fundamental reasons for a hryvnia weakening in the coming months but the market is currently entirely sentiment-driven. The new IMF tranche is key to returning confidence to the market, but the prospects for that are fully contingent on the adoption of an IMF-supported package of fiscal laws for 2016. We believe prospects are good.

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